SECOND DIVISION

[G.R. No. 143581. January 7, 2008.]

KOREA TECHNOLOGIES CO., LTD. , petitioner, vs. HON. ALBERTO
A. LERMA, in his capacity as Presiding Judge of Branch 256 of
Regional Trial Court of Muntinlupa City, and PACIFIC GENERAL
STEEL MANUFACTURING CORPORATION, respondents.
DECISION
VELASCO, JR., J :
p

In our jurisdiction, the policy is to favor alternative methods of resolving disputes,

particularly in civil and commercial disputes. Arbitration along with mediation,
conciliation, and negotiation, being inexpensive, speedy and less hostile methods
have long been favored by this Court. The petition before us puts at issue an
arbitration clause in a contract mutually agreed upon by the parties stipulating that
they would submit themselves to arbitration in a foreign country. Regrettably,
instead of hastening the resolution of their dispute, the parties wittingly or
unwittingly prolonged the controversy.
Petitioner Korea Technologies Co., Ltd. (KOGIES) is a Korean corporation which is
engaged in the supply and installation of Liqueed Petroleum Gas (LPG) Cylinder
manufacturing plants, while private respondent Pacic General Steel Manufacturing
Corp. (PGSMC) is a domestic corporation.
On March 5, 1997, PGSMC and KOGIES executed a Contract 1 whereby KOGIES
would set up an LPG Cylinder Manufacturing Plant in Carmona, Cavite. The contract
was executed in the Philippines. On April 7, 1997, the parties executed, in Korea, an
Amendment for Contract No. KLP-970301 dated March 5, 1997 2 amending the
terms of payment. The contract and its amendment stipulated that KOGIES will ship
the machinery and facilities necessary for manufacturing LPG cylinders for which
PGSMC would pay USD 1,224,000. KOGIES would install and initiate the operation
of the plant for which PGSMC bound itself to pay USD 306,000 upon the plant's
production of the 11-kg. LPG cylinder samples. Thus, the total contract price
amounted to USD 1,530,000.
On October 14, 1997, PGSMC entered into a Contract of Lease 3 with Worth
Properties, Inc. (Worth) for use of Worth's 5,079-square meter property with a
4,032-square meter warehouse building to house the LPG manufacturing plant. The
monthly rental was PhP322,560 commencing on January 1, 1998 with a 10%
annual increment clause. Subsequently, the machineries, equipment, and facilities
for the manufacture of LPG cylinders were shipped, delivered, and installed in the
Carmona plant. PGSMC paid KOGIES USD 1,224,000.

However, gleaned from the Certicate 4 executed by the parties on January 22,
1998, after the installation of the plant, the initial operation could not be conducted
as PGSMC encountered nancial diculties aecting the supply of materials, thus
forcing the parties to agree that KOGIES would be deemed to have completely
complied with the terms and conditions of the March 5, 1997 contract.
SDHacT

For the remaining balance of USD306,000 for the installation and initial operation
of the plant, PGSMC issued two postdated checks: (1) BPI Check No. 0316412 dated
January 30, 1998 for PhP4,500,000; and (2) BPI Check No. 0316413 dated March
30, 1998 for PhP4,500,000. 5
When KOGIES deposited the checks, these were dishonored for the reason
"PAYMENT STOPPED." Thus, on May 8, 1998, KOGIES sent a demand letter 6 to
PGSMC threatening criminal action for violation of Batas Pambansa Blg. 22 in case
of nonpayment. On the same date, the wife of PGSMC's President faxed a letter
dated May 7, 1998 to KOGIES' President who was then staying at a Makati City
hotel. She complained that not only did KOGIES deliver a dierent brand of
hydraulic press from that agreed upon but it had not delivered several equipment
parts already paid for.
On May 14, 1998, PGSMC replied that the two checks it issued KOGIES were fully
funded but the payments were stopped for reasons previously made known to
KOGIES. 7
On June 1, 1998, PGSMC informed KOGIES that PGSMC was canceling their
Contract dated March 5, 1997 on the ground that KOGIES had altered the quantity
and lowered the quality of the machineries and equipment it delivered to PGSMC,
and that PGSMC would dismantle and transfer the machineries, equipment, and
facilities installed in the Carmona plant. Five days later, PGSMC led before the
Oce of the Public Prosecutor an Adavit-Complaint for Estafa docketed as I.S. No.
98-03813 against Mr. Dae Hyun Kang, President of KOGIES.
On June 15, 1998, KOGIES wrote PGSMC informing the latter that PGSMC could not
unilaterally rescind their contract nor dismantle and transfer the machineries and
equipment on mere imagined violations by KOGIES. It also insisted that their
disputes should be settled by arbitration as agreed upon in Article 15, the arbitration
clause of their contract.
On June 23, 1998, PGSMC again wrote KOGIES reiterating the contents of its June
1, 1998 letter threatening that the machineries, equipment, and facilities installed
in the plant would be dismantled and transferred on July 4, 1998. Thus, on July 1,
1998, KOGIES instituted an Application for Arbitration before the Korean
Commercial Arbitration Board (KCAB) in Seoul, Korea pursuant to Art. 15 of the
Contract as amended.
On July 3, 1998, KOGIES led a Complaint for Specic Performance, docketed as
Civil Case No. 98-117 8 against PGSMC before the Muntinlupa City Regional Trial
Court (RTC). The RTC granted a temporary restraining order (TRO) on July 4, 1998,
which was subsequently extended until July 22, 1998. In its complaint, KOGIES

alleged that PGSMC had initially admitted that the checks that were stopped were
not funded but later on claimed that it stopped payment of the checks for the
reason that "their value was not received" as the former allegedly breached their
contract by "altering the quantity and lowering the quality of the machinery and
equipment" installed in the plant and failed to make the plant operational although
it earlier certied to the contrary as shown in a January 22, 1998 Certicate.
Likewise, KOGIES averred that PGSMC violated Art. 15 of their Contract, as
amended, by unilaterally rescinding the contract without resorting to arbitration.
KOGIES also asked that PGSMC be restrained from dismantling and transferring the
machinery and equipment installed in the plant which the latter threatened to do
on July 4, 1998.
On July 9, 1998, PGSMC filed an opposition to the TRO arguing that KOGIES was not
entitled to the TRO since Art. 15, the arbitration clause, was null and void for being
against public policy as it ousts the local courts of jurisdiction over the instant
controversy.
On July 17, 1998, PGSMC filed its Answer with Compulsory Counterclaim 9 asserting
that it had the full right to dismantle and transfer the machineries and equipment
because it had paid for them in full as stipulated in the contract; that KOGIES was
not entitled to the PhP9,000,000 covered by the checks for failing to completely
install and make the plant operational; and that KOGIES was liable for damages
amounting to PhP4,500,000 for altering the quantity and lowering the quality of
the machineries and equipment. Moreover, PGSMC averred that it has already paid
PhP2,257,920 in rent (covering January to July 1998) to Worth and it was not
willing to further shoulder the cost of renting the premises of the plant considering
that the LPG cylinder manufacturing plant never became operational.
EcaDCI

After the parties submitted their Memoranda, on July 23, 1998, the RTC issued an
Order denying the application for a writ of preliminary injunction, reasoning that
PGSMC had paid KOGIES USD 1,224,000, the value of the machineries and
equipment as shown in the contract such that KOGIES no longer had proprietary
rights over them. And nally, the RTC held that Art. 15 of the Contract as amended
was invalid as it tended to oust the trial court or any other court jurisdiction over
any dispute that may arise between the parties. KOGIES' prayer for an injunctive
writ was denied. 10 The dispositive portion of the Order stated:
WHEREFORE, in view of the foregoing consideration, this Court believes and
so holds that no cogent reason exists for this Court to grant the writ of
preliminary injunction to restrain and refrain defendant from dismantling the
machineries and facilities at the lot and building of Worth Properties,
Incorporated at Carmona, Cavite and transfer the same to another site: and
therefore denies plaintiff's application for a writ of preliminary injunction.

On July 29, 1998, KOGIES led its Reply to Answer and Answer to Counterclaim. 11
KOGIES denied it had altered the quantity and lowered the quality of the
machinery, equipment, and facilities it delivered to the plant. It claimed that it had
performed all the undertakings under the contract and had already produced
certied samples of LPG cylinders. It averred that whatever was unnished was

PGSMC's fault since it failed to procure raw materials due to lack of funds. KOGIES,
relying on Chung Fu Industries (Phils.), Inc. v. Court of Appeals , 12 insisted that the
arbitration clause was without question valid.
After KOGIES led a Supplemental Memorandum with Motion to Dismiss 13
answering PGSMC's memorandum of July 22, 1998 and seeking dismissal of
PGSMC's counterclaims, KOGIES, on August 4, 1998, led its Motion for
Reconsideration 14 of the July 23, 1998 Order denying its application for an
injunctive writ claiming that the contract was not merely for machinery and
facilities worth USD 1,224,000 but was for the sale of an "LPG manufacturing plant"
consisting of "supply of all the machinery and facilities" and "transfer of technology"
for a total contract price of USD 1,530,000 such that the dismantling and transfer of
the machinery and facilities would result in the dismantling and transfer of the very
plant itself to the great prejudice of KOGIES as the still unpaid owner/seller of the
plant. Moreover, KOGIES points out that the arbitration clause under Art. 15 of the
Contract as amended was a valid arbitration stipulation under Art. 2044 of the Civil
Code and as held by this Court in Chung Fu Industries (Phils.), Inc. 15
In the meantime, PGSMC led a Motion for Inspection of Things 16 to determine
whether there was indeed alteration of the quantity and lowering of quality of the
machineries and equipment, and whether these were properly installed. KOGIES
opposed the motion positing that the queries and issues raised in the motion for
inspection fell under the coverage of the arbitration clause in their contract.
On September 21, 1998, the trial court issued an Order (1) granting PGSMC's
motion for inspection; (2) denying KOGIES' motion for reconsideration of the July
23, 1998 RTC Order; and (3) denying KOGIES' motion to dismiss PGSMC's
compulsory counterclaims as these counterclaims fell within the requisites of
compulsory counterclaims.
On October 2, 1998, KOGIES led an Urgent Motion for Reconsideration 17 of the
September 21, 1998 RTC Order granting inspection of the plant and denying
dismissal of PGSMC's compulsory counterclaims.
Ten days after, on October 12, 1998, without waiting for the resolution of its
October 2, 1998 urgent motion for reconsideration, KOGIES led before the Court of
Appeals (CA) a petition for certiorari 18 docketed as CA-G.R. SP No. 49249, seeking
annulment of the July 23, 1998 and September 21, 1998 RTC Orders and praying
for the issuance of writs of prohibition, mandamus, and preliminary injunction to
enjoin the RTC and PGSMC from inspecting, dismantling, and transferring the
machineries and equipment in the Carmona plant, and to direct the RTC to enforce
the specific agreement on arbitration to resolve the dispute.
In the meantime, on October 19, 1998, the RTC denied KOGIES' urgent motion for
reconsideration and directed the Branch Sheri to proceed with the inspection of
the machineries and equipment in the plant on October 28, 1998. 19
Thereafter, KOGIES led a Supplement to the Petition

20

in CA-G.R. SP No. 49249

informing the CA about the October 19, 1998 RTC Order. It also reiterated its prayer
for the issuance of the writs of prohibition, mandamus and preliminary injunction
which was not acted upon by the CA. KOGIES asserted that the Branch Sheri did
not have the technical expertise to ascertain whether or not the machineries and
equipment conformed to the specications in the contract and were properly
installed.
TaISDA

On November 11, 1998, the Branch Sheri led his Sheri's Report 21 nding that
the enumerated machineries and equipment were not fully and properly installed.
The Court of Appeals affirmed the trial court and declared
the arbitration clause against public policy
On May 30, 2000, the CA rendered the assailed Decision 22 arming the RTC Orders
and dismissing the petition for certiorari filed by KOGIES. The CA found that the RTC
did not gravely abuse its discretion in issuing the assailed July 23, 1998 and
September 21, 1998 Orders. Moreover, the CA reasoned that KOGIES' contention
that the total contract price for USD 1,530,000 was for the whole plant and had not
been fully paid was contrary to the nding of the RTC that PGSMC fully paid the
price of USD 1,224,000, which was for all the machineries and equipment.
According to the CA, this determination by the RTC was a factual nding beyond the
ambit of a petition for certiorari.
On the issue of the validity of the arbitration clause, the CA agreed with the lower
court that an arbitration clause which provided for a nal determination of the legal
rights of the parties to the contract by arbitration was against public policy.
On the issue of nonpayment of docket fees and non-attachment of a certicate of
non-forum shopping by PGSMC, the CA held that the counterclaims of PGSMC were
compulsory ones and payment of docket fees was not required since the Answer
with counterclaim was not an initiatory pleading. For the same reason, the CA said
a certificate of non-forum shopping was also not required.
Furthermore, the CA held that the petition for certiorari had been led prematurely
since KOGIES did not wait for the resolution of its urgent motion for reconsideration
of the September 21, 1998 RTC Order which was the plain, speedy, and adequate
remedy available. According to the CA, the RTC must be given the opportunity to
correct any alleged error it has committed, and that since the assailed orders were
interlocutory, these cannot be the subject of a petition for certiorari.
Hence, we have this Petition for Review on Certiorari under Rule 45.
The Issues
Petitioner posits that the appellate court committed the following errors:
a.
PRONOUNCING THE QUESTION OF OWNERSHIP OVER THE
MACHINERY AND FACILITIES AS "A QUESTION OF FACT" "BEYOND THE
AMBIT OF A PETITION FOR CERTIORARI" INTENDED ONLY FOR
CORRECTION OF ERRORS OF JURISDICTION OR GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OF (SIC) EXCESS OF JURISDICTION,

AND CONCLUDING THAT THE TRIAL COURT'S FINDING ON THE SAME
QUESTION WAS IMPROPERLY RAISED IN THE PETITION BELOW;
b.
DECLARING AS NULL AND VOID THE ARBITRATION CLAUSE IN
ARTICLE 15 OF THE CONTRACT BETWEEN THE PARTIES FOR BEING
"CONTRARY TO PUBLIC POLICY" AND FOR OUSTING THE COURTS OF
JURISDICTION;
c.
DECREEING PRIVATE RESPONDENT'S COUNTERCLAIMS TO BE ALL
COMPULSORY NOT NECESSITATING PAYMENT OF DOCKET FEES AND
CERTIFICATION OF NON-FORUM SHOPPING;
d.
RULING THAT THE PETITION WAS FILED PREMATURELY WITHOUT
WAITING FOR THE RESOLUTION OF THE MOTION FOR RECONSIDERATION
OF THE ORDER DATED SEPTEMBER 21, 1998 OR WITHOUT GIVING THE
TRIAL COURT AN OPPORTUNITY TO CORRECT ITSELF;
aHIEcS

e.
PROCLAIMING THE TWO ORDERS DATED JULY 23 AND SEPTEMBER
21, 1998 NOT TO BE PROPER SUBJECTS OF CERTIORARI AND PROHIBITION
FOR BEING "INTERLOCUTORY IN NATURE;"
f.
NOT GRANTING THE RELIEFS AND REMEDIES PRAYED FOR IN HE (SIC)
PETITION AND, INSTEAD, DISMISSING THE SAME FOR ALLEGEDLY
"WITHOUT MERIT." 23

The Court's Ruling

The petition is partly meritorious.
Before we delve into the substantive issues, we shall rst tackle the procedural
issues.
The rules on the payment of docket fees for counterclaims and
cross claims were amended effective August 16, 2004

KOGIES strongly argues that when PGSMC led the counterclaims, it should have
paid docket fees and led a certicate of non-forum shopping, and that its failure to
do so was a fatal defect.
We disagree with KOGIES.
As aptly ruled by the CA, the counterclaims of PGSMC were incorporated in its
Answer with Compulsory Counterclaim dated July 17, 1998 in accordance with
Section 8 of Rule 11, 1997 Revised Rules of Civil Procedure, the rule that was
eective at the time the Answer with Counterclaim was led. Sec. 8 on existing
counterclaim or cross-claim states, "A compulsory counterclaim or a cross-claim that
a defending party has at the time he files his answer shall be contained therein."
On July 17, 1998, at the time PGSMC led its Answer incorporating its
counterclaims against KOGIES, it was not liable to pay ling fees for said

counterclaims being compulsory in nature. We stress, however, that eective

August 16, 2004 under Sec. 7, Rule 141, as amended by A.M. No. 04-2-04-SC,
docket fees are now required to be paid in compulsory counterclaim or cross-claims.
As to the failure to submit a certificate of forum shopping, PGSMC's Answer is not an
initiatory pleading which requires a certication against forum shopping under Sec.
5 24 of Rule 7, 1997 Revised Rules of Civil Procedure. It is a responsive pleading,
hence, the courts a quo did not commit reversible error in denying KOGIES' motion
to dismiss PGSMC's compulsory counterclaims.
Interlocutory orders proper subject of certiorari
Citing Gamboa v. Cruz, 25 the CA also pronounced that "certiorari and Prohibition
are neither the remedies to question the propriety of an interlocutory order of the
trial court." 26 The CA erred on its reliance on Gamboa. Gamboa involved the denial
of a motion to acquit in a criminal case which was not assailable in an action for
certiorari since the denial of a motion to quash required the accused to plead and to
continue with the trial, and whatever objections the accused had in his motion to
quash can then be used as part of his defense and subsequently can be raised as
errors on his appeal if the judgment of the trial court is adverse to him. The general
rule is that interlocutory orders cannot be challenged by an appeal. 27 Thus, in
Yamaoka v. Pescarich Manufacturing Corporation, we held:
The proper remedy in such cases is an ordinary appeal from an adverse
judgment on the merits , incorporating in said appeal the grounds for
assailing the interlocutory orders. Allowing appeals from interlocutory orders
would result in the 'sorry spectacle' of a case being subject of a
counterproductive ping-pong to and from the appellate court as often as a
trial court is perceived to have made an error in any of its interlocutory
rulings. However, where the assailed interlocutory order was issued with
grave abuse of discretion or patently erroneous and the remedy of appeal
would not aord adequate and expeditious relief, the Court allows certiorari
as a mode of redress. 28

Also, appeals from interlocutory orders would open the oodgates to endless
occasions for dilatory motions. Thus, where the interlocutory order was issued
without or in excess of jurisdiction or with grave abuse of discretion, the remedy is
certiorari. 29
HDcaAI

The alleged grave abuse of discretion of the respondent court equivalent to lack of
jurisdiction in the issuance of the two assailed orders coupled with the fact that
there is no plain, speedy, and adequate remedy in the ordinary course of law amply
provides the basis for allowing the resort to a petition for certiorari under Rule 65.
Prematurity of the petition before the CA
Neither do we think that KOGIES was guilty of forum shopping in ling the petition
for certiorari. Note that KOGIES' motion for reconsideration of the July 23, 1998
RTC Order which denied the issuance of the injunctive writ had already been

denied. Thus, KOGIES' only remedy was to assail the RTC's interlocutory order via a
petition for certiorari under Rule 65.

While the October 2, 1998 motion for reconsideration of KOGIES of the September
21, 1998 RTC Order relating to the inspection of things, and the allowance of the
compulsory counterclaims has not yet been resolved, the circumstances in this case
would allow an exception to the rule that before certiorari may be availed of, the
petitioner must have led a motion for reconsideration and said motion should have
been rst resolved by the court a quo. The reason behind the rule is "to enable the
lower court, in the rst instance, to pass upon and correct its mistakes without the
intervention of the higher court." 30
The September 21, 1998 RTC Order directing the branch sheri to inspect the plant,
equipment, and facilities when he is not competent and knowledgeable on said
matters is evidently awed and devoid of any legal support. Moreover, there is an
urgent necessity to resolve the issue on the dismantling of the facilities and any
further delay would prejudice the interests of KOGIES. Indeed, there is real and
imminent threat of irreparable destruction or substantial damage to KOGIES'
equipment and machineries. We nd the resort to certiorari based on the gravely
abusive orders of the trial court sans the ruling on the October 2, 1998 motion for
reconsideration to be proper.
The Core Issue: Article 15 of the Contract
We now go to the core issue of the validity of Art. 15 of the Contract, the arbitration
clause. It provides:
Article 15.
Arbitration. All disputes, controversies, or dierences
which may arise between the parties, out of or in relation to or in connection
with this Contract or for the breach thereof, shall nally be settled by
arbitration in Seoul, Korea in accordance with the Commercial Arbitration
Rules of the Korean Commercial Arbitration Board. The award rendered
by the arbitration(s) shall be nal and binding upon both parties
concerned. (Emphasis supplied.)

Petitioner claims the RTC and the CA erred in ruling that the arbitration clause is
null and void.
Petitioner is correct.
Established in this jurisdiction is the rule that the law of the place where the
contract is made governs. Lex loci contractus. The contract in this case was perfected
here in the Philippines. Therefore, our laws ought to govern. Nonetheless, Art. 2044
of the Civil Code sanctions the validity of mutually agreed arbitral clause or the
finality and binding effect of an arbitral award. Art. 2044 provides, "Any stipulation
that the arbitrators' award or decision shall be nal, is valid, without
prejudice to Articles 2038, 2039 and 2040." (Emphasis supplied.)

Arts. 2038, 31 2 0 3 9 , 32 and 2040 33 abovecited refer to instances where a

compromise or an arbitral award, as applied to Art. 2044 pursuant to Art. 2043, 34
may be voided, rescinded, or annulled, but these would not denigrate the nality of
the arbitral award.
The arbitration clause was mutually and voluntarily agreed upon by the parties. It
has not been shown to be contrary to any law, or against morals, good customs,
public order, or public policy. There has been no showing that the parties have not
dealt with each other on equal footing. We nd no reason why the arbitration
clause should not be respected and complied with by both parties. In Gonzales v.
Climax Mining Ltd., 35 we held that submission to arbitration is a contract and that a
clause in a contract providing that all matters in dispute between the parties shall
be referred to arbitration is a contract. 36 Again in Del Monte Corporation-USA v.
Court of Appeals, we likewise ruled that "[t]he provision to submit to arbitration any
dispute arising therefrom and the relationship of the parties is part of that contract
and is itself a contract." 37
CAacTH

Arbitration clause not contrary to public policy

The arbitration clause which stipulates that the arbitration must be done in Seoul,
Korea in accordance with the Commercial Arbitration Rules of the KCAB, and that
the arbitral award is nal and binding, is not contrary to public policy. This Court has
sanctioned the validity of arbitration clauses in a catena of cases. In the 1957 case
of Eastboard Navigation Ltd. v. Juan Ysmael and Co., Inc. , 38 this Court had occasion
to rule that an arbitration clause to resolve dierences and breaches of mutually
agreed contractual terms is valid. In BF Corporation v. Court of Appeals, we held
that "[i]n this jurisdiction, arbitration has been held valid and constitutional. Even
before the approval on June 19, 1953 of Republic Act No. 876, this Court has
countenanced the settlement of disputes through arbitration. Republic Act No. 876
was adopted to supplement the New Civil Code's provisions on arbitration." 39 And
in LM Power Engineering Corporation v. Capitol Industrial Construction Groups, Inc. ,
we declared that:
Being an inexpensive, speedy and amicable method of settling disputes,
arbitration along with mediation, conciliation and negotiation is
encouraged by the Supreme Court. Aside from unclogging judicial dockets,
arbitration also hastens the resolution of disputes, especially of the
commercial kind. It is thus regarded as the "wave of the future" in
international civil and commercial disputes. Brushing aside a contractual
agreement calling for arbitration between the parties would be a step
backward.
Consistent with the above-mentioned policy of encouraging alternative
dispute resolution methods, courts should liberally construe arbitration
clauses. Provided such clause is susceptible of an interpretation that covers
the asserted dispute, an order to arbitrate should be granted. Any doubt
should be resolved in favor of arbitration. 40

Having said that the instant arbitration clause is not against public policy, we come

to the question on what governs an arbitration clause specifying that in case of any
dispute arising from the contract, an arbitral panel will be constituted in a foreign
country and the arbitration rules of the foreign country would govern and its award
shall be final and binding.
RA 9285 incorporated the UNCITRAL Model law
to which we are a signatory
For domestic arbitration proceedings, we have particular agencies to arbitrate
disputes arising from contractual relations. In case a foreign arbitral body is chosen
by the parties, the arbitration rules of our domestic arbitration bodies would not be
applied. As signatory to the Arbitration Rules of the UNCITRAL Model Law on
International Commercial Arbitration 41 of the United Nations Commission on
International Trade Law (UNCITRAL) in the New York Convention on June 21, 1985,
the Philippines committed itself to be bound by the Model Law. We have even
incorporated the Model Law in Republic Act No. (RA) 9285, otherwise known as the
Alternative Dispute Resolution Act of 2004 entitled An Act to Institutionalize the
Use of an Alternative Dispute Resolution System in the Philippines and to Establish
the Oce for Alternative Dispute Resolution, and for Other Purposes, promulgated
on April 2, 2004. Secs. 19 and 20 of Chapter 4 of the Model Law are the pertinent
provisions:
CHAPTER 4 INTERNATIONAL COMMERCIAL ARBITRATION
SEC. 19.
Adoption of the Model Law on International Commercial
Arbitration. International commercial arbitration shall be governed by the
Model Law on International Commercial Arbitration (the "Model Law")
adopted by the United Nations Commission on International Trade Law on
June 21, 1985 (United Nations Document A/40/17) and recommended for
enactment by the General Assembly in Resolution No. 40/72 approved on
December 11, 1985, copy of which is hereto attached as Appendix "A".
cEATSI

SEC. 20.
Interpretation of Model Law. In interpreting the Model Law,
regard shall be had to its international origin and to the need for uniformity
in its interpretation and resort may be made to the travaux preparatories
and the report of the Secretary General of the United Nations Commission
on International Trade Law dated March 25, 1985 entitled, "International
Commercial Arbitration: Analytical Commentary on Draft Trade identied by
reference number A/CN. 9/264."

While RA 9285 was passed only in 2004, it nonetheless applies in the instant case
since it is a procedural law which has a retroactive eect. Likewise, KOGIES led its
application for arbitration before the KCAB on July 1, 1998 and it is still pending
because no arbitral award has yet been rendered. Thus, RA 9285 is applicable to the
instant case. Well-settled is the rule that procedural laws are construed to be
applicable to actions pending and undetermined at the time of their passage, and
are deemed retroactive in that sense and to that extent. As a general rule, the
retroactive application of procedural laws does not violate any personal rights
because no vested right has yet attached nor arisen from them. 42

Among the pertinent features of RA 9285 applying and incorporating the UNCITRAL
Model Law are the following:
(1)

The RTC must refer to arbitration in proper cases

Under Sec. 24, the RTC does not have jurisdiction over disputes that are properly
the subject of arbitration pursuant to an arbitration clause, and mandates the
referral to arbitration in such cases, thus:
SEC. 24.
Referral to Arbitration. A court before which an action is
brought in a matter which is the subject matter of an arbitration agreement
shall, if at least one party so requests not later than the pre-trial conference,
or upon the request of both parties thereafter, refer the parties to
arbitration unless it nds that the arbitration agreement is null and void,
inoperative or incapable of being performed.

(2)

Foreign arbitral awards must be confirmed by the RTC

Foreign arbitral awards while mutually stipulated by the parties in the arbitration
clause to be nal and binding are not immediately enforceable or cannot be
implemented immediately. Sec. 35 43 of the UNCITRAL Model Law stipulates the
requirement for the arbitral award to be recognized by a competent court for
enforcement, which court under Sec. 36 of the UNCITRAL Model Law may refuse
recognition or enforcement on the grounds provided for. RA 9285 incorporated
these provisos to Secs. 42, 43, and 44 relative to Secs. 47 and 48, thus:

SEC. 42.
Application of the New York Convention . The New York
Convention shall govern the recognition and enforcement of arbitral awards
covered by said Convention.
The recognition and enforcement of such arbitral awards shall be led with
the Regional Trial Court in accordance with the rules of procedure to be
promulgated by the Supreme Court. Said procedural rules shall provide that
the party relying on the award or applying for its enforcement shall le with
the court the original or authenticated copy of the award and the arbitration
agreement. If the award or agreement is not made in any of the ocial
languages, the party shall supply a duly certied translation thereof into any
of such languages.
The applicant shall establish that the country in which foreign arbitration
award was made in party to the New York Convention.
xxx xxx xxx
SEC. 43.
Recognition and Enforcement of Foreign Arbitral Awards Not
Covered by the New York Convention . The recognition and enforcement
of foreign arbitral awards not covered by the New York Convention shall be
done in accordance with procedural rules to be promulgated by the
Supreme Court. The Court may, on grounds of comity and reciprocity,

recognize and enforce a non-convention award as a convention award.

IEHaSc

SEC. 44.
Foreign Arbitral Award Not Foreign Judgment . A foreign
arbitral award when conrmed by a court of a foreign country, shall be
recognized and enforced as a foreign arbitral award and not as a judgment
of a foreign court.
A foreign arbitral award, when conrmed by the Regional Trial Court, shall be
enforced in the same manner as nal and executory decisions of courts of
law of the Philippines.
xxx xxx xxx
SEC. 47.
Venue and Jurisdiction . Proceedings for recognition and
enforcement of an arbitration agreement or for vacations, setting aside,
correction or modication of an arbitral award, and any application with a
court for arbitration assistance and supervision shall be deemed as special
proceedings and shall be led with the Regional Trial Court (i) where
arbitration proceedings are conducted; (ii) where the asset to be attached or
levied upon, or the act to be enjoined is located; (iii) where any of the parties
to the dispute resides or has his place of business; or (iv) in the National
Judicial Capital Region, at the option of the applicant.
SEC. 48.
Notice of Proceeding to Parties . In a special proceeding for
recognition and enforcement of an arbitral award, the Court shall send
notice to the parties at their address of record in the arbitration, or if any
part cannot be served notice at such address, at such party's last known
address. The notice shall be sent al least fteen (15) days before the date
set for the initial hearing of the application.

It is now clear that foreign arbitral awards when conrmed by the RTC are deemed
not as a judgment of a foreign court but as a foreign arbitral award, and when
confirmed, are enforced as final and executory decisions of our courts of law.
Thus, it can be gleaned that the concept of a nal and binding arbitral award is
similar to judgments or awards given by some of our quasi-judicial bodies, like the
National Labor Relations Commission and Mines Adjudication Board, whose nal
judgments are stipulated to be nal and binding, but not immediately executory in
the sense that they may still be judicially reviewed, upon the instance of any party.
Therefore, the nal foreign arbitral awards are similarly situated in that they need
first to be confirmed by the RTC.
(3)

The RTC has jurisdiction to review foreign arbitral awards

Sec. 42 in relation to Sec. 45 of RA 9285 designated and vested the RTC with
specic authority and jurisdiction to set aside, reject, or vacate a foreign arbitral
award on grounds provided under Art. 34 (2) of the UNCITRAL Model Law. Secs. 42
and 45 provide:
SEC. 42.
Application of the New York Convention . The New York
Convention shall govern the recognition and enforcement of arbitral awards

covered by said Convention.

The recognition and enforcement of such arbitral awards shall be led with
the Regional Trial Court in accordance with the rules of procedure to be
promulgated by the Supreme Court. Said procedural rules shall provide that
the party relying on the award or applying for its enforcement shall le with
the court the original or authenticated copy of the award and the arbitration
agreement. If the award or agreement is not made in any of the ocial
languages, the party shall supply a duly certied translation thereof into any
of such languages.
The applicant shall establish that the country in which foreign arbitration
award was made is party to the New York Convention.
If the application for rejection or suspension of enforcement of an award
has been made, the Regional Trial Court may, if it considers it proper, vacate
its decision and may also, on the application of the party claiming recognition
or enforcement of the award, order the party to provide appropriate
security.
ADHcTE

xxx xxx xxx

SEC. 45.
Rejection of a Foreign Arbitral Award. A party to a foreign
arbitration proceeding may oppose an application for recognition and
enforcement of the arbitral award in accordance with the procedures and
rules to be promulgated by the Supreme Court only on those grounds
enumerated under Article V of the New York Convention. Any other ground
raised shall be disregarded by the Regional Trial Court.

Thus, while the RTC does not have jurisdiction over disputes governed by arbitration
mutually agreed upon by the parties, still the foreign arbitral award is subject to
judicial review by the RTC which can set aside, reject, or vacate it. In this sense,
what this Court held in Chung Fu Industries (Phils.), Inc. relied upon by KOGIES is
applicable insofar as the foreign arbitral awards, while nal and binding, do not oust
courts of jurisdiction since these arbitral awards are not absolute and without
exceptions as they are still judicially reviewable. Chapter 7 of RA 9285 has made it
clear that all arbitral awards, whether domestic or foreign, are subject to judicial
review on specific grounds provided for.
(4)

Grounds for judicial review dierent in domestic and foreign

arbitral awards

The dierences between a nal arbitral award from an international or foreign

arbitral tribunal and an award given by a local arbitral tribunal are the specic
grounds or conditions that vest jurisdiction over our courts to review the awards.
For foreign or international arbitral awards which must rst be conrmed by the
RTC, the grounds for setting aside, rejecting or vacating the award by the RTC are
provided under Art. 34 (2) of the UNCITRAL Model Law.
For nal domestic arbitral awards, which also need conrmation by the RTC

pursuant to Sec. 23 of RA 876 44 and shall be recognized as nal and executory

decisions of the RTC, 45 they may only be assailed before the RTC and vacated on
the grounds provided under Sec. 25 of RA 876. 46
(5)

RTC decision of assailed foreign arbitral award appealable

Sec. 46 of RA 9285 provides for an appeal before the CA as the remedy of an

aggrieved party in cases where the RTC sets aside, rejects, vacates, modies, or
corrects an arbitral award, thus:
SEC. 46.
Appeal from Court Decision or Arbitral Awards . A decision of
the Regional Trial Court conrming, vacating, setting aside, modifying or
correcting an arbitral award may be appealed to the Court of Appeals in
accordance with the rules and procedure to be promulgated by the
Supreme Court.
The losing party who appeals from the judgment of the court conrming an
arbitral award shall be required by the appellate court to post a counterbond
executed in favor of the prevailing party equal to the amount of the award in
accordance with the rules to be promulgated by the Supreme Court.

Thereafter, the CA decision may further be appealed or reviewed before this Court
through a petition for review under Rule 45 of the Rules of Court.
PGSMC has remedies to protect its interests
Thus, based on the foregoing features of RA 9285, PGSMC must submit to the
foreign arbitration as it bound itself through the subject contract. While it may have
misgivings on the foreign arbitration done in Korea by the KCAB, it has available
remedies under RA 9285. Its interests are duly protected by the law which requires
that the arbitral award that may be rendered by KCAB must be conrmed here by
the RTC before it can be enforced.
With our disquisition above, petitioner is correct in its contention that an arbitration
clause, stipulating that the arbitral award is nal and binding, does not oust our
courts of jurisdiction as the international arbitral award, the award of which is not
absolute and without exceptions, is still judicially reviewable under certain
conditions provided for by the UNCITRAL Model Law on ICA as applied and
incorporated in RA 9285.
aHSCcE

Finally, it must be noted that there is nothing in the subject Contract which
provides that the parties may dispense with the arbitration clause.
Unilateral rescission improper and illegal
Having ruled that the arbitration clause of the subject contract is valid and binding
on the parties, and not contrary to public policy; consequently, being bound to the
contract of arbitration, a party may not unilaterally rescind or terminate the
contract for whatever cause without first resorting to arbitration.

What this Court held in University of the Philippines v. de Los Angeles 47 and
reiterated in succeeding cases, 48 that the act of treating a contract as rescinded on
account of infractions by the other contracting party is valid albeit provisional as it
can be judicially assailed, is not applicable to the instant case on account of a valid
stipulation on arbitration. Where an arbitration clause in a contract is availing,
neither of the parties can unilaterally treat the contract as rescinded since whatever
infractions or breaches by a party or dierences arising from the contract must be
brought rst and resolved by arbitration, and not through an extrajudicial rescission
or judicial action.

The issues arising from the contract between PGSMC and KOGIES on whether the
equipment and machineries delivered and installed were properly installed and
operational in the plant in Carmona, Cavite; the ownership of equipment and
payment of the contract price; and whether there was substantial compliance by
KOGIES in the production of the samples, given the alleged fact that PGSMC could
not supply the raw materials required to produce the sample LPG cylinders, are
matters proper for arbitration. Indeed, we note that on July 1, 1998, KOGIES
instituted an Application for Arbitration before the KCAB in Seoul, Korea pursuant to
Art. 15 of the Contract as amended. Thus, it is incumbent upon PGSMC to abide by
its commitment to arbitrate.
Corollarily, the trial court gravely abused its discretion in granting PGSMC's Motion
for Inspection of Things on September 21, 1998, as the subject matter of the motion
is under the primary jurisdiction of the mutually agreed arbitral body, the KCAB in
Korea.
In addition, whatever findings and conclusions made by the RTC Branch Sheriff from
the inspection made on October 28, 1998, as ordered by the trial court on October
19, 1998, is of no worth as said Sheri is not technically competent to ascertain the
actual status of the equipment and machineries as installed in the plant.
For these reasons, the September 21, 1998 and October 19, 1998 RTC Orders
pertaining to the grant of the inspection of the equipment and machineries have to
be recalled and nullified.
Issue on ownership of plant proper for arbitration
Petitioner assails the CA ruling that the issue petitioner raised on whether the total
contract price of USD 1,530,000 was for the whole plant and its installation is
beyond the ambit of a Petition for Certiorari.
Petitioner's position is untenable.
It is settled that questions of fact cannot be raised in an original action for certiorari.
49 Whether or not there was full payment for the machineries and equipment and
installation is indeed a factual issue prohibited by Rule 65.

However, what appears to constitute a grave abuse of discretion is the order of the
RTC in resolving the issue on the ownership of the plant when it is the arbitral body
(KCAB) and not the RTC which has jurisdiction and authority over the said issue.
The RTC's determination of such factual issue constitutes grave abuse of discretion
and must be reversed and set aside.
RTC has interim jurisdiction to protect the rights of the parties
Anent the July 23, 1998 Order denying the issuance of the injunctive writ paving
the way for PGSMC to dismantle and transfer the equipment and machineries, we
find it to be in order considering the factual milieu of the instant case.
AcDaEH

Firstly, while the issue of the proper installation of the equipment and machineries
might well be under the primary jurisdiction of the arbitral body to decide, yet the
RTC under Sec. 28 of RA 9285 has jurisdiction to hear and grant interim measures
to protect vested rights of the parties. Sec. 28 pertinently provides:
SEC. 28.
Grant of interim Measure of Protection. (a) It is not
incompatible with an arbitration agreement for a party to request,
before constitution of the tribunal, from a Court to grant such
measure. After constitution of the arbitral tribunal and during arbitral
proceedings, a request for an interim measure of protection, or modication
thereof, may be made with the arbitral or to the extent that the arbitral
tribunal has no power to act or is unable to act eectivity, the
request may be made with the Court. The arbitral tribunal is deemed
constituted when the sole arbitrator or the third arbitrator, who has been
nominated, has accepted the nomination and written communication of said
nomination and acceptance has been received by the party making the
request.
(b)

The following rules on interim or provisional relief shall be observed:

Any party may request that provisional relief be granted against the adverse
party.
Such relief may be granted:
(i)

to prevent irreparable loss or injury;

(ii)

to provide security for the performance of any obligation;

(iii)

to produce or preserve any evidence; or

(iv)

to compel any other appropriate act or omission.

(c)
The order granting provisional relief may be conditioned upon the
provision of security or any act or omission specified in the order.
(d)
Interim or provisional relief is requested by written application
transmitted by reasonable means to the Court or arbitral tribunal as the
case may be and the party against whom the relief is sought, describing in

appropriate detail the precise relief, the party against whom the relief is
requested, the grounds for the relief, and the evidence supporting the
request.
(e)

The order shall be binding upon the parties.

(f)
Either party may apply with the Court for assistance in implementing
or enforcing an interim measure ordered by an arbitral tribunal.
(g)
A party who does not comply with the order shall be liable for all
damages resulting from noncompliance, including all expenses, and
reasonable attorney's fees, paid in obtaining the order's judicial enforcement.
(Emphasis ours.)

Art. 17 (2) of the UNCITRAL Model Law on ICA denes an "interim measure" of
protection as:
Article 17.

Power of arbitral tribunal to order interim measures

xxx xxx xxx

(2)
A n interim measure is any temporary measure, whether in the
form of an award or in another form, by which, at any time prior to the
issuance of the award by which the dispute is nally decided, the arbitral
tribunal orders a party to:

(a)
Maintain or restore the status quo pending determination of the
dispute;
(b)
Take action that would prevent, or refrain from taking action that is
likely to cause, current or imminent harm or prejudice to the arbitral process
itself;
DTISaH

(c)
Provide a means of preserving assets out of which a subsequent
award may be satisfied; or
(d)
Preserve evidence that may be relevant and material to the resolution
of the dispute.

Art. 17 J of UNCITRAL Model Law on ICA also grants courts power and jurisdiction to
issue interim measures:
Article 17 J. Court-ordered interim measures
A court shall have the same power of issuing an interim measure in relation
to arbitration proceedings, irrespective of whether their place is in the
territory of this State, as it has in relation to proceedings in courts. The
court shall exercise such power in accordance with its own procedures in
consideration of the specific features of international arbitration.

In the recent 2006 case of Transeld Philippines, Inc. v. Luzon Hydro Corporation ,
we were explicit that even "the pendency of an arbitral proceeding does not

foreclose resort to the courts for provisional reliefs." We explicated this way:
As a fundamental point, the pendency of arbitral proceedings does not
foreclose resort to the courts for provisional reliefs. The Rules of the ICC,
which governs the parties' arbitral dispute, allows the application of a party
to a judicial authority for interim or conservatory measures. Likewise,
Section 14 of Republic Act (R.A.) No. 876 (The Arbitration Law) recognizes
the rights of any party to petition the court to take measures to safeguard
and/or conserve any matter which is the subject of the dispute in arbitration.
In addition, R.A. 9285, otherwise known as the "Alternative Dispute
Resolution Act of 2004," allows the ling of provisional or interim measures
with the regular courts whenever the arbitral tribunal has no power to act or
to act effectively. 50
AacCIT

It is thus beyond cavil that the RTC has authority and jurisdiction to grant interim
measures of protection.
Secondly, considering that the equipment and machineries are in the possession of
PGSMC, it has the right to protect and preserve the equipment and machineries in
the best way it can. Considering that the LPG plant was non-operational, PGSMC
has the right to dismantle and transfer the equipment and machineries either for
their protection and preservation or for the better way to make good use of them
which is ineluctably within the management discretion of PGSMC.
Thirdly, and of greater import is the reason that maintaining the equipment and
machineries in Worth's property is not to the best interest of PGSMC due to the
prohibitive rent while the LPG plant as set-up is not operational. PGSMC was losing
PhP322,560 as monthly rentals or PhP3.87M for 1998 alone without considering
the 10% annual rent increment in maintaining the plant.
Fourthly, and corollarily, while the KCAB can rule on motions or petitions relating to
the preservation or transfer of the equipment and machineries as an interim
measure, yet on hindsight, the July 23, 1998 Order of the RTC allowing the transfer
of the equipment and machineries given the non-recognition by the lower courts of
the arbitral clause, has accorded an interim measure of protection to PGSMC which
would otherwise been irreparably damaged.
Fifth, KOGIES is not unjustly prejudiced as it has already been paid a substantial
amount based on the contract. Moreover, KOGIES is amply protected by the arbitral
action it has instituted before the KCAB, the award of which can be enforced in our
jurisdiction through the RTC. Besides, by our decision, PGSMC is compelled to
submit to arbitration pursuant to the valid arbitration clause of its contract with
KOGIES.
PGSMC to preserve the subject equipment and machineries
Finally, while PGSMC may have been granted the right to dismantle and transfer
the subject equipment and machineries, it does not have the right to convey or
dispose of the same considering the pending arbitral proceedings to settle the

dierences of the parties. PGSMC therefore must preserve and maintain the subject
equipment and machineries with the diligence of a good father of a family 51 until
final resolution of the arbitral proceedings and enforcement of the award, if any.
WHEREFORE, this petition is PARTLY GRANTED, in that:

(1)
The May 30, 2000 CA Decision in CA-G.R. SP No. 49249 is REVERSED and
SET ASIDE;
(2)
The September 21, 1998 and October 19, 1998 RTC Orders in Civil Case No.
98-117 are REVERSED and SET ASIDE;
(3)
The parties are hereby ORDERED to submit themselves to the arbitration of
their dispute and differences arising from the subject Contract before the KCAB; and
(4)
PGSMC is hereby ALLOWED to dismantle and transfer the equipment and
machineries, if it had not done so, and ORDERED to preserve and maintain them
until the finality of whatever arbitral award is given in the arbitration proceedings.
No pronouncement as to costs.

IEAHca

SO ORDERED.

Quisumbing, Carpio, Carpio-Morales and Tinga, JJ., concur.

Footnotes
1.

Id. at 58-65; signed by KOGIES' President Dae Hyun Kang and PGSMC President
Honorio Santiago.

2.

Id. at 94.

3.

Id. at 208-218; signed by PGSMC President Honorio Santiago and Worth President
Wilson L. Chua.

4.

Id. at 95; signed by KOGIES' President Dae Hyun Kang and PGSMC President
Honorio Santiago.

5.

Id. at 207.

6.

Id. at 221.

7.

Id. at 222.

8.

Id. at 47-51; dated July 1, 1998.

9.

Id. at 66-82.

10.

Id. at 97.

AEDcIH

11.

Id. at 83-89.

12.

G.R. No. 96283, February 25, 1992, 206 SCRA 545.

13.

Rollo, pp. 108-111.

14.

Id. at 98-100.

15.

Supra note 12.

16.

Rollo, pp. 101-105.

17.

Id. at 113-115.

18.

Id. at 120-146; dated October 9, 1998.

19.

Id. at 119.

20.

Id. at 116-118.

21.

Id. at 266-268.

22.
23.
24.

cIDHSC

Id. at 40. Penned by Associate Justice Elvi John S. Asuncion and concurred in by
Associate Justices Ma. Alicia Austria-Martinez and Portia Alio-Hormachuelos.
Id. at 16-17; original in boldface.
SEC. 5.
Certication against forum shopping. The plainti or principal party
shall certify under oath in the complaint or other initiatory pleading asserting
a claim for relief, or in a sworn certication annexed thereto and simultaneously
led therewith: (a) that he has not theretofore commenced any action or led any
claim involving the same issues in any court, tribunal or quasi-judicial agency and,
to the best of his knowledge, no such other action or claim is pending therein; (b)
if there is such other pending action or claim, a complete statement of the present
status thereof; and (c) if he should thereafter learn that the same or similar action
or claim has been led or is pending, he shall report that fact within ve (5) days
therefrom to the court where his aforesaid complaint or initiatory pleading has
been filed. (Emphasis supplied.)
Failure to comply with the foregoing requirements shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for the
dismissal of the case without prejudice, unless otherwise provided, upon motion
and after hearing. The submission of a false certication or non-compliance with
any of the undertakings therein shall constitute indirect contempt of court, without
prejudice to the corresponding administrative and criminal actions. If the acts of
the party or his counsel clearly constitute willful and deliberate forum shopping,
the same shall be ground for summary dismissal with prejudice and shall
constitute direct contempt, as well as a cause for administrative sanctions.

25.

G.R. No. L-56291, June 27, 1988, 162 SCRA 642.

26.

Rollo, p. 45.

AECacS

27.

La Tondea Distillers, Inc. v. Ponferrada , G.R. No. 109656, November 21, 1996,
264 SCRA 540; Mendoza v. Court of Appeals , G.R. No. 81909, September 5, 1991,
201 SCRA 343; MB Finance Corporation v. Abesamis , G.R. No. 93875, March 22,
1991, 195 SCRA 592; Quisumbing v. Gumban , G.R. No. 85156, February 5, 1991,
193 SCRA 520.

28.

G.R. No. 146079, July 20, 2001, 361 SCRA 672, 680-681, citing Go v. Court of
Appeals , G.R. No. 128954, October 8, 1998, 297 SCRA 574.

29.

I Regalado, REMEDIAL LAW COMPENDIUM 502 (2002).

30.

Id. at 721 (8th rev. ed.).

31.

Art. 2038. A compromise in which there is mistake, fraud, violence, intimidation,

undue inuence, or falsity of documents is subject to the provisions of Article
1330 [voidable] of this Code.
However, one of the parties cannot set up a mistake of fact as against the
other if the latter, by virtue of the compromise, has withdrawn from a litigation
already commenced.

32.

Art. 2039. When the parties compromise generally on all dierences which they
might have with each other, the discovery of documents referring to one or more
but not to all of the questions settled shall not itself be a cause for annulment or
rescission of the compromise, unless said documents have been concealed by one
of the parties.
But the compromise may be annulled or rescinded if it refers only to one thing
to which one of the parties has no right, as shown by the newly-discovered
documents.

33.

Art. 2040. If after a litigation has been decided by a nal judgment, a compromise
should be agreed upon, either or both parties being unaware of the existence of
the final judgment, the compromise may be rescinded.
Ignorance of a judgment which may be revoked or set aside is not a valid
ground for attacking a compromise.

34.

Art. 2043. The provisions of the preceding Chapter upon compromises shall also
be applicable to arbitrations.

35.

G.R. No. 161957 and G.R. No. 167994, January 22, 2007, 512 SCRA 148; citing
Manila Electric Co. v. Pasay Transportation Co., 57 Phil. 600 (1932).
THESAD

36.

Id. at 603.

37.

G.R. No. 136154, February 7, 2001, 351 SCRA 373, 381.

38.

02 Phil. 1 (1957).

39.

G.R. No. 120105, March 27, 1998, 288 SCRA 267, 286.

40.

G.R. No. 141833, March 26, 2003, 399 SCRA 562, 569-570; citations omitted.

41.

Adopted by the UNCITRAL on June 21, 1985 (United Nations Document A/40/17)
and recommended for enactment by the General Assembly in Resolution No.
40/72, approved on 11 December 1985. Subsequently amended on July 7, 2006.

42.

In the Matter to Declare in Contempt of Court Hon. Simeon A. Datumanong,

Secretary of DPWH, G.R. No. 150274, August 4, 2006, 497 SCRA 626, 636-637;
citing Calacala v. Republic, G.R. No. 154415, July 28, 2005, 464 SCRA 438, 446.

43.

Id. Art. 35 (1) provides

Article 35.

Recognition and enforcement

(1)
An arbitral award, irrespective of the country in which it was made, shall
be recognized as binding and, upon application in writing to the competent court,
shall be enforced subject to the provisions of this article and of article 36.
44.

"An Act to Authorize the Making of Arbitration and Submission Agreements, to

Provide for the Appointment of Arbitrators and the Procedure for Arbitration in
Civil Controversies, and for Other Purposes" (1953).

45.

RA 9285, Sec. 40.

46.

Id., Sec. 41.

47.

G.R. No. L-28602, September 29, 1970, 35 SCRA 102.

48.

CHDTEA

See Lorenzo Shipping Corp. v. BJ Marthel International, Inc. , G.R. No. 145483.
November 19, 2004, 443 SCRA 163; Subic Bay Metropolitan Authority v. Universal
International Group of Taiwan , G.R. No. 131680, September 14, 2000, 340 SCRA
359; Philippine National Construction Corp. v. Mars Construction Enterprises, Inc. ,
G.R. No. 133909, February 15, 2000, 325 SCRA 624; Cheng v. Genato , G.R. No.
129760, December 29, 1998, 300 SCRA 722; Goldenrod, Inc. v. Court of Appeals ,
G.R. No. 126812, November 24, 1998, 299 SCRA 141; Adelfa Properties, Inc. v.
Court of Appeals , G.R. No. 111238, January 25, 1995; 240 SCRA 565; Bowe v.
Court of Appeals , G.R. No. 95771, March 19, 1993, 220 SCRA 158; Lim v. Court of
Appeals , G.R. No. 85733, February 23, 1990, 182 SCRA 564.

49.

Suarez v. NLRC, G.R. No. 124723, July 31, 1998, 293 SCRA 496, 502.

50.

G.R. No. 146717, May 19, 2006, 490 SCRA 14, 20-21.

51.

Cf. Article 1173 of the Civil Code.